New Construction v. Rehab

Revised: January 2019

 

By Sarah Owens and Michael Livingston

Derby Building, circa 1957

When Council recently approved a grant of almost $600,000 in HOME funds for a new, low income, multi-family housing project on Marine Drive in West Salem, no one asked why that project was chosen over the less-costly Oakhill/Sunnyslope rehab project.  

When the Community Services and Housing Commission, who recommended funding the Marine Drive project, met to discuss the issue, they gave it very short shrift.  They seemed to feel the choice was obvious:  the rehab project won't "add new housing." 

To some, the choice is just that simple.  New construction is always better than rehab, because it "adds new housing."  They forget that housing is not permanent and can be lost to gradual deterioration, especially rental housing.

The Oakhill/Sunnyslope rehab project was ready to begin this summer, and the new construction project on Marine Drive required additional financing and wouldn't begin for at least another year.  It also cost more.  Point is, new construction is not always better, but depends on the particular factors and circumstances involved.

Take UGM, for example.  The rehab potential of the current Men's Mission has been maxed out for a very long time, and everyone agrees they need a new facility.  Similarly, the Lighthouse Shelter on Front Street no longer meets the needs of the homeless community, due in large measure to design limitations that make it unsuitable as a low-barrier shelter.  But, should it be renovated or reconstructed (torn down and built up), maybe some place else?  Another difficult choice was Yaquina Hall, which the City has decided to rehab for low-income housing, even though a tear-down, build up project would have been less costly and yielded more units.

Across the country and globe, communities have learned the hard way what happens when they take for granted their existing low-income housing stock.  In CANDO, for example, there was once the Derby Building at Court and High Streets, which was home to the Senator Hotel, which opened in 1928 with 111 rooms, 32 with tubs and 24 with showers.  Neighborhood Services staff recently gave CANDO a file of old newsletters, published between 1991 and 2008, which chronicle, after a fashion, the decision to demolish the Derby Building to make way for Courthouse Square and an off-street transit mall.

By the early 1990s, Marion County had owned the Derby almost 20 years, using the northern part as offices, along with the Mid-Willamette Council of Governments, and renting out the southern half to low-income individuals through the Marion County Housing Authority.  Over time, it seems, the County/Housing Authority had allowed the property to decline (only minimally maintained), which contributed to an increased vacancy rate, and, by the 1980s, the project was in the red.  An article in the Statesman Journal on the Senator Hotel reported that, in 1982, one-bedroom units ran between $84 and $149, or between $216 and $384 in today's dollars.  In one three-month period, the Housing Authority lost $7,000, about $18,000 today. 

In 1991, John Winter, chair of the CANDO board, reported serving "as a representative...on the Joint Development Committee...studying the feasibility of developing the Senator Block for a combined Transit Mall and County Office Building", and that CANDO, "along with other members of the committee[,] continued to question the Senator Block location and were successful in getting the Transit District and the County to rethink this proposal."  Reasons were not stated.

In 1992, CANDO reported:

The City Council has authorized the purchase of the Monterey Apartments, located at Ferry Street SE.  The apartments were damaged by fire last summer and vacated.  The building has been boarded up and will be kept that way for up to six months... 

During the six-month holding period, the City will investigate the possibility of using the building in the proposed Transit District project.  In this project[,] the Transit District would acquire the Senator Hotel from Marion County and clear the site for an off-street transit terminal.  Clearing the site would delete the low-rent housing in the "Derby Building" (the corner portion of the Senator Building) [sic].  The Monterey Apartment building would serve as a relocation site for Senator Hotel residents. 

Several other options exist.  The original suggestion was that the building can be rehabilitated for low-income public housing.  CAN-DO, the Downtown Development Board, and the Salem Housing Advisory Committee opposed such a project due to the high renovation costs.  The Housing Advisory Committee felt that the money could be better spent in building less costly housing in the area.  If the Transit District project does not materialize this option may still be considered.

The City could choose to demolish the building and use the land for surface parking by the City or resell the property for parking by others (perhaps First Methodist Church)... purposes.

There are a number of good alternatives for the building and land but none that everyone agrees upon.  Low-income housing is needed, by rehabilitation of the Apartments would be expensive and not necessarily desirable for long[-]term housing.  The one recommendation that was repeatedly voiced by the public at the February 3 City Council meeting was that something should be done to remove the blight of the current Monterey Apartments.         

In 1993, CANDO board chair Jim Adams reported, "the future of the Monterey Apartments is an ongoing issue...[t]he City...proposed renovating it for low-income housing.  CAN-DO opposed the plan because of the high cost of renovation per unit.  The City abandoned the plan and is currently seeking private development of the property."

In the end, the Monterey was reduced to a surface parking lot, which it remains today.  As for the transit mall project, the 1995 newsletter states, "District officials have been studying alternate sites for years.  The recent preferred location, the Oddfellows Building, has proven very controversial." 

By 1996, the "Senator Hotel block" had been selected as the site of a new county office building and transit mall.  That year's newsletter makes no  mention of the Senator Hotel residents, or any relocation plan.  In 1997, the Derby was torn down, and its remains trucked to back side of Minto-Brown Island Park.

The point of the story is not to second-guess these decisions, but to illustrate how communities sometimes make choices they might not have been made had they understood fully all the costs/implications of their decisions.  The newsletters during this period reflect more concern over youth hanging out downtown and getting into trouble than they do over occasional problems with "transients."  Nowhere in the newsletters is homelessness is even mentioned.

DHSTF 6/13/18 Agenda

Today, however, twenty years after the demise of the Senator Hotel and the Monterey Apartments, hundreds of CANDO residents are living in the streets.  Many are ill, many are addicted, and many are "trespassed" or otherwise barred (by age, criminal record, mental health, or intoxication level) from accessing a limited number of shelter beds.  The number of day shelters and shelter beds has dwindled, though the number of homeless has not, and CANDO has been divided over plans to expand capacity, and whether to adopt a "sit-lie" ordinance aimed at excluding certain homeless individuals from downtown.  Although housing is being built downtown, none of it's low-income.  A downtown task force is preparing to recommend "homeless solutions" to mitigate health and other problems created by so many residents living in the streets (at left), but they will not include housing.  Those "solutions" will be in addition to the downtown sobering center the City plans to open in 2019.  On the "positive side", the City's Homeless Rental Assistance Program (HRAP) has been a success, and will be funded through June 2019, and homelessness has made it to the top of the list of community concerns.

Most likely, allowing the number of people living in the streets to grow, year after year, has cost the community far more than it would have cost to keep them housed.  It's not second-guessing to observe we as a community could have, should have acted sooner, and need to do more.  Projects must involve both rehab and new construction, and whatever the projects cost, they will cost more later than they will now, and they will cost more when we get into big fights about them (e.g., the fight over the design of the new police facility).  So, let's be thoughtful and far-sighted in our approach to these problems.

4/28/19 Update:  Susann Kaltwasser recalls that

Salem had at least 3 SRO hotels downtown up until about the 1970s...the Bligh was on State Street just off Liberty. It burned down and since has been a parking lot. The Senator Hotel was replaced in the 1990s by the Marion Square office building. And the Madison Hotel was torn down for the Cinnabar Movie Theater. The rooms were very cheap and in very high demand. I knew the managers of the Bligh and they would rent 'sleeping rooms' for 50 cents a night. Essentially they were former hotel rooms with two or three bunkbeds in each room with each person getting a small cupboard.